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Thakral Corporation’s 1H2026 headline loss does not tell the full story. Strip out those market movements and the picture looks considerably healthier. |
Thakral CEO Inderbethal Singh Thakral with Independent Chairman Lim Swe Guan.
1. The 1H loss is less worrying than it looks
Thakral's S$6.4 million attributable loss was overwhelmingly caused by a S$22.3 million unrealised fair-value loss on quoted investments, mainly GemLife.
Excluding quoted-investment movements, adjusted attributable profit actually rose 47% to S$7.6 million from S$5.2 million.
Since GemLife and The Beauty Tech Group are now listed, movements in their share prices run through Thakral's income statement.
Consequently, reported earnings can swing wildly even when the underlying businesses are performing well, as reflected by adjusted operating earnings + NAV.
2. The Lifestyle business is underappreciated
In a strong development, Lifestyle revenue rose 34% to S$209.2 million, while segment profit increased 47% to S$10.7 million. Management expects the segment to at least maintain 25% growth for FY2026.
The growth is fairly broad.
South Asian revenue increased 28% to S$110.1 million, driven largely by DJI imaging products, while Greater China revenue rose 44% to S$54.9 million.
Nespresso India's revenue more than doubled, and management targets profitability in FY2027.
The attraction isn't just the initial coffee machine sale. Once installed, they create continuing capsule consumption.
When it comes to hotels and companies, the machines are placed in four- and five-star hotels—including Taj and Oberoi—as well as offices.
DJI's consumer portfolio now includes: drones + Osmo action cameras + handheld cameras + gimbals + microphones + accessories. Continued sales growth is expected in the Indian creator economy: millions of content creators increasingly need cameras, microphones, stabilisers and related equipment.
Management said 2H has historically benefited from Diwali, Christmas and other festive spending.
A caveat is that Lifestyle remains a distribution-led business.
Management declined to disclose the profit split between drones and beauty/Nespresso and acknowledged that there are limits to the margins distributors can earn.
3. There is substantial asset backing
At 30 June, Thakral listed S$553.9 million of investment carrying value.
|
Investment |
Carrying value (S$ million) |
% of portfolio |
|
GemLife (ASX-listed) |
263.5 |
48% |
|
Gurugram Real Estate |
114.0 |
21% |
|
Japan Real Estate Investments (5 office buildings + 1 hotel) |
86.7 |
16% |
|
The Beauty Tech Group (LSE-listed) |
38.6 |
7% |
|
Riverwalk Office Singapore |
31.2 |
6% |
|
Next Innovation Ventures |
14.7 |
3% |
|
Other Unquoted Investments |
5.1 |
1% |
|
Total carrying value |
553.9 |
~100% |
GemLife and Beauty Tech Group alone had a combined market value of about S$300.9 million, greater than Thakral's entire S$265 million market capitalisation.
It's not that investors get everything else for free: Thakral also has S$301.6 million of liabilities, including S$150.2 million of borrowings and S$81.4 million of deferred tax liabilities.
4. GemLife remains the biggest driver of NAV
Thakral owns 16.8% of ASX-listed GemLife, representing almost half of Thakral's investment portfolio.
The story remains attractive: GemLife has guided to FY2026 EPS of A28.5–30.0 cents, representing 20–27% growth, following FY2025 underlying NPAT of A$90 million.
Its long development pipeline gives Thakral substantial exposure to Australia's structural demand for over-50s housing.
5. Gurugram is the future transformational second leg
Thakral has increased its effective interest in its Gurugram vehicle to 95.28% after acquiring an additional 81.64% stake for about S$93.9 million.
The project has development potential exceeding 2.5 million sq ft, incorporating residential apartments, a hospital of up to 900 beds and a health-and-wellness centre.
Thakral intends for a hospital operator to fund, develop and operate the hospital under a long-term arrangement, while a development partner undertakes residential construction and sales.
Management said the hospital could take three to four years to construct and become operational, while the residential development could take six to eight years.
| The leverage has gone up |
Borrowings jumped from S$72.7 million at end-2025 to S$150.2 million, principally after Thakral issued S$70 million of 5% notes.
Gearing rose to 0.41x, while cash stood at S$41.2 million.
Operating cash flow was also negative S$13.6 million in 1H, largely because the rapidly growing Lifestyle operation absorbed cash into inventory and receivables.
Expenses have risen because Thakral is spending on marketing, new stores and other growth investments, while underlying non-growth administrative expenses increased only 14%.
So higher leverage, Indian development execution, GemLife concentration and the conglomerate structure justify some holding-company discount.
An interesting bull case is that NAV rises over the next two to three years through GemLife growth, Gurugram development, Osaka property appreciation and value creation from the Lifestyle division. |
→ See also: 1H2026 results Powerpoint deck.
